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Understanding Xi Jinping and China's New Generation of Leaders

Interview with Cheng Li

February 13, 2012

Chinese Vice President Xi Jinping, widely expected to be China’s next leader, will be in Washington, D.C., on February 14. Cheng Li discusses the importance of Vice President Xi’s visit, the challenges that Xi and a new generation of leaders face at home and in the United States, and how the U.S.-China relationship might evolve in coming years.

Chinese Vice President Xi Jinping, widely expected to be China’s next leader, will arrive in Washington, D.C., on February 13 for the start of a five-day United States visit that will include meetings with President Barack Obama and Vice President Joe Biden and other senior U.S. government officials. The visit comes at a crucial crossroads for China and the Sino-American relationship, with the United States in the midst of the presidential campaign season and China preparing for a political transition later this year.

NBR talked with Cheng Li, a senior fellow at the Brookings Institution, to get his perspective on the importance of Vice President Xi’s visit, the challenges that Xi and a new generation of leaders face at home and in the United States, and how the U.S.-China relationship might evolve in coming years.

Vice President Xi Jinping, widely expected to be China’s next leader, is visiting the United States this month for a meeting with President Barack Obama and Vice President Joe Biden. Can you briefly discuss the importance of this visit, which occurs ahead of the Chinese leadership transition later this year?

It’s best to look at this visit from two perspectives, first from the United States’ view, then from China’s. Xi Jinping will soon become the leader of the world’s most populous country and the second-largest economy in the world. Certainly the United States wants to develop a more effective China policy, especially when China has more influence on the global economy than perhaps ever before. In all the major issues for the United States, such as rebalancing of the economy, nuclear nonproliferation regarding Iran and North Korea, climate change, and cyber security, the United States needs China to be cooperative. Based on President Obama’s most recent State of the Union speech, you can see that he expressed his frustration on the economic front—on topics like intellectual property rights, market access, and the so-called Chinese indigenous innovation policies (that is, China’s economic protectionism). The United States wants China to be a responsible stakeholder in the global economic recovery, which is very important for the U.S. economy.

From China’s perspective, the February trip is perhaps even more important than it is for the United States. In a way, Vice President Xi has two perceived audiences, or you could say he is playing two chess games simultaneously—one with the United States and the other with China’s domestic audience. The Chinese audience is even more important from his perspective because people in China will want to see whether or not he can represent China well, earn respect from the United States, and act like a wise statesman or even a global leader. Most importantly, he will try to advance or protect his country’s best interests as people in China watch. If the trip is successful, Xi will gain political capital to consolidate his own power back at home. But he cannot afford for this trip to be a failure. It would hurt Xi politically if he were to say something unnecessarily confrontational or act unlike a statesman. But it will probably be even worse if he is seen as too accommodating to the West and not firmly advancing or protecting China’s interests.

Vice President Biden visited China and Vice President Xi last year. In what ways do these reciprocal visits help the United States better understand Xi’s background and China’s new generation of leaders before they take the mantle from President Hu Jintao later this year? How do such visits help Xi understand his American counterparts?

The United States wants to know more about Xi Jinping’s personality and policy orientations, especially on issues regarding the United States. Twenty, ten, or even five years ago, China’s economy was considered less significant, less consequential than say, those of the EU, Japan, Canada, or even South Korea and Mexico. But today, China is rapidly becoming a global economic powerhouse, and the PRC government’s policies—monetary, trade, taxation, industrial, environmental, and energy policies—will likely have a major impact on both the U.S. and global economies. These are important things for U.S. leaders to consider.

But this visit can also help Xi better understand the United States—its values, concerns, and goodwill to China—while reducing his misperceptions or misunderstandings, if any, of the United States. So this visit is a very important opportunity for the United States to show the best of America to Xi. At the same time, this is also an opportunity to help Xi understand all sorts of challenges confronting the United States.

Finally, the United States wants to cultivate a good relationship with Xi, and as such, he will meet not only with President Obama and Vice President Biden but also with the secretary of state, the secretary of defense, and the secretary of the treasury. The United States wants to develop mutual respect, if not mutual trust, with Xi and the Chinese leadership. At the very least, the United States should develop a working relationship based on mutual respect. A personal relationship is of value everywhere, but especially so in Chinese political culture.

During Xi’s visit, the United States may bring up issues like trade and intellectual property rights. Considering that Xi will likely take over the leadership from President Hu, what should policymakers in the United States understand about Xi’s background and likely policies toward the United States?

Certainly, the issues of China’s economic protectionism, access to China’s market, and appreciation of the renminbi, as well as intellectual property rights, are all important issues. But in terms of background, Xi Jinping is perhaps a sign of hope for the United States because he previously served as provincial leader in Fujian and Zhejiang and party chief in Shanghai. These are provinces or cities famous for their dynamic private sectors. So Xi certainly has been seen as very pro-market. He is also seen as a good personal friend of former U.S. treasury secretary Hank Paulson. That tells us a lot about the possibility that Xi will push for some kind of financial liberalization and renminbi convertibility.

China is also considering whether to allow foreign companies and banks to be listed on the Chinese stock exchange, especially in Shanghai, the city where Xi served as party chief. If this happens, foreign companies will welcome the move. Xi is well positioned to push for all these developments, particularly with Shanghai as an experiment center for financial liberalization.

At the same time, we should understand that Xi faces serious economic challenges at home, including a property bubble, inflation, and a rising unemployment rate. China also faces increasing labor costs, so the previous advantages for Chinese economic growth are now significantly reduced. Particularly if the property bubble bursts, China’s middle class could be hurt, and the country’s economy could be in big trouble.

In addition, Xi currently faces a very serious dilemma with China’s state-owned enterprises. These monopolies in major industries such as telecommunications, oil, shipping, and railway are very strong interest groups that are corrupt and very much disliked by the Chinese public. So if Xi wants support from the people, he needs to deal with these monopolies seriously. But at the same time, if he does too much to curtail their rapid expansion, he could undermine his power base and see some serious challenges from these powerful interest groups.

How have U.S. and Chinese leaders become acquainted in the past? How is this year’s process different and what does it tell us about the future of the U.S.-China relationship?

The difference is that both countries are now facing serious economic difficulties, and both are going through a leadership transition or election. This is unusual in recent history. Also, each country is not perceived well in the other country. In the United States, there tends to be a lot of blame put on China, particularly on economic issues that are central to the current U.S. presidential campaign. When economic problems are discussed in the United States nowadays, you cannot avoid talking about China. For example, China comes up often in the Republican primary debates and was also a focus of President Obama’s last State of the Union address, when he criticized China’s economic protectionism. Back in China, you can see a growing nationalist or even anti-American sentiment, not only among the youth, but also among public intellectuals, and certainly the Chinese military. These factors are relatively new.

Social media is also new. Public opinion in both countries is influenced by this new technology. Politics, particularly in China, cannot be controlled as before, as social media now plays a very important role. Social media users look at leaders very carefully, and as I said above, an example is the view of whether Xi Jinping appears too soft or too tough. It would be a disaster if Xi is being seen as the leader who sacrifices China’s interests to appease the United States, or is perceived as unnecessarily arrogant or blunt. So the situation now is also very difficult because social media is instant, used simultaneously by many, and widely spread among Chinese urban residents and even rural residents.

You wrote in the July 2010 issue of Asia Policy that Chinese leadership has become much more diversified, largely owing to the growing number of foreign-educated returnees, and that numerous domestic constituencies are pushing to exert more influence over China’s foreign policy. Can you characterize the make-up of the new generation of leadership and what role Xi Jinping will likely play in its continuing evolution? Does the United States play any role in these developments?

The Chinese leadership, without question, has become increasingly diversified in a number of ways, but particularly in educational background. In the 1990s and the early part of the last decade, China was really led by technocrats, with engineers occupying all nine spots of the Politburo Standing Committee. But now this technocratic leadership is coming to an end. If you look at the new generation of leaders, the so-called fifth generation, most of them studied social sciences, like law or economics, or the humanities.

There is also tension between the two main political factions in China. On the one hand, you have “princelings,” the children of high-ranking officials who come from very prominent families like Xi Jinping’s, and, on the other hand, you have former Communist Youth League officials, previously headed by President Hu Jintao and Vice Premier Li Keqiang, the latter who is likely to become premier. This tension is a very important characteristic in Chinese elite politics.

In addition, those trained in the United States are starting to emerge, and they are different from both the third generation of leaders, who studied in the Soviet Union and Eastern Europe, and the fourth generation, who were largely domestically trained. This time we will see more leaders who are foreign-educated or at least have spent time in the United States. For example, Xi himself visited the United States in 1985. If you look at the lower, or ministerial, level of the party, many officials earned their degrees in the United States. They tend to be more cosmopolitan and open-minded, and they may change the country’s mode of economic growth more effectively than their predecessors, from a market-driven economy to one that is more consumption-driven. And they really tend to promote the private sector, as I mentioned with Xi, who certainly was very good at that as a provincial leader. They also probably want to find a new way of governance and emphasize the rule of law, and perhaps even contribute to China’s democratic development. But at the same time, we should keep in mind that China is at a very important crossroads, and if you really want to open China’s political system, you will have to deal with many expected and unexpected challenges.

In terms of the United States, it should avoid lecturing China because doing so does not resonate well there. The United States should have a respectful dialogue and does need to express its concerns on very important issues like human rights, religious freedom, democracy, and rule of law, not because of disrespect toward China, but due to respect for China and the Chinese people. A country that had made such a remarkable economic miracle will not stop at the gate of political democracy. The United States should express its values and principles in a respectful dialogue and present its views from the point of view of how the United States learned from its own experiences.

President Obama has made it clear that the United States will be involved in Pacific affairs for years to come and has renewed the country’s commitment both to allies such as Australia, Japan, and South Korea and to emerging economic and strategic partners such as India and Vietnam. What has been the Chinese response to this position so far, and what kind of response can the United States expect from Xi and the new Chinese leadership going forward?

Last year was a good year for the United States’ Asia-Pacific policy. The United States really improved its relationships with many countries in the region. But this policy has a cost because it might have alienated the PRC leaders and the Chinese public. From the Chinese perspective, these developments are part of a U.S. strategy to contain China. I do not think the United States really wants to contain China, but that is unfortunately how it is being perceived over there. And to a certain extent, that is also how many people in other countries, including some Americans, perceive it.

In China, public intellectuals often talk about the United States promoting anti-China policies—the “five evils”, namely, Taiwanese independence, Tibetan independence, Uyghur independence, the Falun Gong, and the pro-democracy movement. Support for these “five evils” is also putting China in a dangerous international environment, particularly with its neighboring countries. Looking at a map of China, you see it is surrounded by the Korean Peninsula, the East China Sea dispute with Japan, the Taiwan Strait, the South China Sea disputes, and India to the south. So these five spots are considered dangerous, and some in China think that this pressure is overwhelming and that the United States wants to put China down.

This is certainly an issue that the United States should address with Xi Jinping, so as to explain the reasons the United States supports certain policies while at the same time saying why it does not want a conflict with China. This is a difficult task, but the United States should be articulate and challenge some of the misperceptions held among Chinese leaders, particularly Xi.

What else do you think is important for people to understand about Vice President Xi, his visit to the United States, and China’s coming leadership transition?

We should understand that the new Chinese leadership in general, and Xi Jinping in particular, will be confronted by many pressing challenges, including the change in mode of China’s economic growth—from export-led growth with high environmental, energy, and labor costs, to one more driven by domestic consumption and innovation. That will be a painful transformation, but it is the direction for China to go. Also, problems like climate change, resource constraints, economic inequality, and state-owned enterprises at the expense of the private sector are potentially destabilizing for China. There is also the need to effectively integrate about 300 million migrant workers and their families into urban China.

On top of all these domestic challenges, Xi will also need to deal with major international challenges to improve relations with neighboring countries and the United States. It’s important to understand, however, that China today is very much a collective leadership. Xi is only the first among the equals, just like Hu Jintao and Jiang Zemin before him, unlike during the Mao era or Deng era when top leaders had more power. Xi’s power will have constraints put on by other leaders in the Standing Committee when he becomes General Secretary. Between now and the first year of Xi’s administration there will be a “honeymoon” period, but it will not last forever because the public mood in China is quite anxious. They have high expectations from leaders and want them to deliver positive changes soon without waiting several years. This puts tremendous pressure on Xi to deliver on concrete improvements to China’s economic, political, and diplomatic situations.

Cheng Li is director of the John L. Thornton China Center and a senior fellow in the Foreign Policy program at Brookings.